Amazon launched a credit service called Amazon Pay Later for its customers in India. It is a rebrand of Amazon Pay EMI that the US e-commerce launched in September 2018 for its country. The new service has additional benefits like the user can get instant credit on (almost) any of the products which are listed on the online marketplace and access the credit for groceries and utility bills also. The Amazon Pay Later also gives the option to repay after month with no additional fees, or the user can convert the large ticket transactions in the monthly installments for 12 months.
From the Amazon Pay Later service, Amazon aims to improve the purchasing power of Indian customers and make them extend their budgets during online shopping. It lets customers purchase any of the listed products on the marketplace with an option to pay the amount after a month. Also, the customers can opt for an easy EMI option for 12 months. There is an interest rate of one and a half to two percent a month; Amazon also has many products with no-cost EMI option that comes with interest-free benefits.
Amazon Pay Later can also be used to pay the monthly bills of utilities like electricity, water, mobile bills, and recharges. This service can be used by the customers to purchase groceries or other essential items on credit in the lockdown. The service can be used for most of the products on Amazon, but with some exceptions. The exceptions are for the products which are equal to the cash like jewelry, Amazon Pay Gift Card. Amazon Pay balance top-up, products from Amazon Global Store or out of the country or overseas merchants, or bullion (gold and silver).
In an interview with Gadgets 360 Director of Financing and Lending, Vikas Bansal said in the earlier product, i.e., Amazon Pay EMI, the customer can only use it for the installments to buy the big-ticket purchases. But, now the company has done up-gradation to Amazon Pay Later, where the customers can use it for their small-ticket purchases, for payment experience or convenience, or they can use it for the large ticket purchases and pay the installments.
Amazon comes up with the Amazon Pay EMI service in 2018 for the customers who want to buy the products more than Rs. 8,000. Later it was increased to a minimum transaction value of Rs. 3,000.
Customer Feedback brings its creation
Amazon Pay EMI was launched as an answer to the Flipkart Finance EMI and other EMI solutions that were available in the market at that time. Then the Seattle-based company took its step forward with Amazon Pay Later. It comes as a competition mainly for the Flipkart Pay Later. Flipkart Pay Later lets the customer get an instant credit of Rs. 5,000 at zero additional cost for 40 days. Alos, LazyPay allows the repayments for more than 250 websites and an app to clear the payments one time in 15 days, and the credit limit is up to Rs. 1,00,000.
Bansal said that the service given by Amazon is not for its competitors. He also said that it is the customer’s feedback that the company got in earlier days of Amazon Pay EMI that comes with the creation of Amazon Pay Later.
Customers can get Credit for orders as low as Re. 1
Purchase from the Amazon Pay Later can be small as Re. 1 or high up to Rs. 60,000, which is the primary credit limit of the service. Mayank Jain, Leader of Consumer Credit Products in Amazon Pay India, said that the Rs. 60,000 is the limit which is based on the regulations which are provided by the RBI, and it’s not the same limit given by the company.
Amazon continues the partnership with digital lender Capital Float, who was the earlier partner for Amazon Pay EMI. The company brought the Karur Vysya Bank (KVB) to fulfill the customers’ credit requirements.
Jain said to Gadgets 360 that Amazon plans to take the service ahead of its original platform and enable the credit facility to the merchant partners. He said it is allowed for shopping and also for the bill payments. If the customer wants to order from Swiggy or BookMyShow or ClearTrip, then they will be able to use this online and offline merchant wherever Amazon Pay is accepted.
To start with Amazon Pay Later, Amazon is running a guide with a small group of customers. Now, the service has extended to lakhs customers who are eligible.
Bansal said that Amazon initially uses the engagements with Amazon Pay, merchants, and marketplace. The final decision is of the lender, who decides whether the credit should be provided or not.
He said the lender makes the final evaluation and the call on their model also the ability to pay back. But many variables go with this to make sure that it is healthy, also not easy to have a loss rate. So this is what the lenders do.
Jain said that Amazon doesn’t provide any particular customer data to the lenders.
Process to get the service
The customer has to go to the dedicated registration page on the Amazon App to register for Amazon Pay Later. Then the customers have to go to know your customer (KYC) process to allow the service for their Amazon Pay accounts. According to the FAQ page, the company supports two modes of KYC completion first is where the existing KYC on Amazon can be used, and the other is where an OTP based eKYC is directed to bring the customer on board. A PAN number is also compulsory for KYC checks and to start the service.
When the KYC process is completed for the service, then the customer can see their registration status from the Amazon Pay Dashboard, which is available in the Amazon mobile app and on the Amazon.in site. The Dashboard will provide all future transaction records.